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Disciplinary Counsel v. Parnoff

Supreme Court of Connecticut

December 30, 2016


          Argued September 22, 2016

          Adam P. Mauriello, counsel, legal services, with whom were Karyl L. Carrasquilla, chief disciplinary counsel, and, on the brief, Suzanne B. Sutton, for the appellant (plaintiff).

          Charles W. Fleischmann, with whom, on the brief, was Paul E. Pollock, for the appellee (defendant).

          Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald, Espinosa and Robinson, Js. [*]


          ESPINOSA, J.

         In this appeal, we are asked to decide whether an attorney who knowingly appropriated client funds, but did not intend to do so wrongly, ‘‘knowingly misappropriated'' those funds and is therefore subject to mandatory disbarment pursuant to Practice Book § 2-47A.[1] The plaintiff, Disciplinary Counsel, appeals from the judgment of the Appellate Court, which affirmed the judgment of the trial court reprimanding the defendant, Laurence Parnoff, rather than disbarring him pursuant to § 2-47A. Disciplinary Counsel v. Parnoff, 158 Conn.App. 454, 482, 119 A.3d 621 (2015). The plaintiff contends that the trial court improperly interpreted § 2-47A to mandate disbarment only if an attorney appropriates client funds knowingly and with the wrongful intent to steal them. Regardless of the defendant's intent, the plaintiff claims, the defendant's knowledge that the funds he appropriated were disputed is sufficient to disbar him. We conclude that § 2-47A mandates disbarment only when an attorney misappropriates a client's funds both knowingly and intentionally-that is, when an attorney steals from his or her client. Accordingly, we affirm the judgment of the Appellate Court.

         This disciplinary action originates from a twelve year old fee dispute that resulted in several actions and various appeals. The facts and procedural history underlying these actions are set forth in substantial detail in Disciplinary Counsel v. Parnoff, supra, 158 Conn.App. 454, Disciplinary Counsel v. Parnoff, Superior Court, judicial district of Fairfield, Docket No. CV-12-6031943-S (September 19, 2013), Parnoff v. Yuille, 139 Conn.App. 147, 57 A.3d 349 (2012), cert. denied, 307 Conn. 956, 59 A.3d 1192 (2013), and Parnoff v. Mooney, 132 Conn.App. 512, 35A.3d 283 (2011).Wesummarize those facts and the relevant procedural history reflected in the record that are necessary to an understanding of the present case.

         Darcy Yuille had been employed by Bridgeport Hospital (hospital) until a work-related injury led to her termination. Disciplinary Counsel v. Parnoff, supra, 158 Conn.App. 457. In 1996, Yuille retained Attorney Laura Mooney to represent her before the Workers' Compensation Commission on a claim for benefits in connection with her injuries. Parnoff v. Mooney, supra, 132 Conn.App. 514. During Mooney's representation of Yuille, Mooney observed bad faith conduct by the hospital in its handling of the workers' compensation claim. Id. Mooney attempted to refer Yuille's action against the hospital, which claimed that the hospital had handled Yuille's workers' compensation claim in bad faith, to the defendant. Id., 514 n.2. After the defendant ‘‘failed to provide a timely response, '' Mooney decided to undertake the action herself, in addition to undertaking Yuille's workers' compensation claim. Id. The defendant eventually contacted Mooney and Mooney referred Yuille to the defendant for a separate claim against the hospital alleging wrongful discharge. Id.

         In 1998, after Mooney brought the bad faith action, Yuille also retained the defendant to represent her in a bad faith and wrongful discharge action against the hospital. Id., 515. Mooney was initially unaware of the defendant's representation of Yuille in the bad faith and wrongful discharge action because Mooney believed that he was merely retained to pursue the wrongful discharge claim. Id., 514-15. In retaining the defendant, Yuille entered into an agreement that provided the defendant with a contingency fee of 40 percent of gross receipts from the claim. Disciplinary Counsel v. Par-noff, supra, 158 Conn.App. 457. On Yuille's behalf, the defendant commenced the action against the hospital in November, 1998. Parnoff v. Mooney, supra, 132 Conn.App. 515.

         In 2002, the defendant entered into an agreement with the hospital on Yuille's behalf to submit her claim to binding arbitration. Disciplinary Counsel v. Parnoff, supra, 158 Conn.App. 457. After learning of the impending arbitration proceeding-and discovering the overlapping representation-Mooney filed an appearance in the action against the hospital, which the defendant had commenced, and appeared at the arbitration proceeding, over the objection of the hospital. Id. Yuille was awarded approximately $1.1 million as a result of the binding arbitration proceeding. Id., 458.

         In August, 2004, shortly after the arbitration award, Yuille questioned the defendant's fee agreement, claiming that the 40 percent contingency fee was excessive because it violated General Statutes § 52-251c (b), [2] Connecticut's fee cap statute, and that a portion of the defendant's fee should have been allocated to Mooney. Id., 458-60. After receiving the defendant's closing statement indicating that his fee amounted to $438, 413.17, Yuille authorized the defendant to take $125, 000 toward his fee, and to place the remainder of the 40 percent fee in escrow until they could agree on a resolution. Id., 458. After taking $125, 000 toward his fee, the defendant made various disbursements in connection with the arbitration, placing $313, 413.17-the remainder of the disputed 40 percent contingency fee-into a certificate of deposit account (CD) with Chase Bank as escrow, and paying Yuille the balance of the award. Id., 460.

         The defendant and Yuille were unable to resolve the fee dispute, and, in January, 2005, the defendant filed an action against Yuille for breach of contract, unjust enrichment, and bad faith. Id. The defendant also filed a separate action against Mooney for, among other claims, tortious interference with his agreement with Yuille. Id., 459.

         The cases against Mooney and Yuille were consolidated and tried to a jury. Id., 461. On May 20, 2010, the jury returned a verdict for the defendant against Yuille on the defendant's breach of contract claims, and against the defendant on all other claims. Id. The court rendered judgment in accordance with the verdict, and awarded the defendant a total of $252, 044.27 for compensatory damages, interest, and punitive damages.

         The defendant notified Chase Bank not to renew the CD holding the disputed funds, causing it to mature. The defendant then transferred the funds into his personal savings account. Id., 462. This redemption occurred on July 26, 2010, approximately five and one-half years after the funds had been ...

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